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Endemol France back in Dutch hands

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AMSTERDAM, The Netherlands -- Dutch media giant Endemol has agreed to buy back Endemol France from Spain's Telefonica, the company announced Tuesday.

Endemol intends to acquire Endemol France on the basis of an enterprise value of up to €450 million ($586.4 million). Of this amount, €194 million ($252.8 million) will be deferred over a period of four years and be subject to the performance of Endemol France.

The transaction, which remains subject to shareholder approval, will be financed by bank debt and future cash flow.

Endemol France is expected to realize a net profit of about €175 million ($228.1 million) for 2006 at a normalized EBITDA margin that is considerably above the company average. Led by such reality formats as "Star Academy," "Deal or No Deal" and "Watch Your Step," Endemol France's business mix is 90% non-scripted programming with 10% in the digital media realm.

The French business was left out of Telefonica's float of Endemol in November 2005 because of a disagreement with the previous owners of Endemol France regarding the deferred purchase price for the French business. In September, an agreement was reached with the Endemol France principals, creating an opening for the company's acquisition.

Meanwhile, in Rome, Italian broadcast giant Mediaset said Tuesday that it has no interest in Endemol because the Dutch company's shares are too pricey.

A Mediaset spokesman confirmed local press reports that said Mediaset is now looking elsewhere in its efforts to expand outside Italy.

Endemol founder John De Mol, who sold a majority stake in the company to Spain's Telefonica in 2001, reportedly approached Mediaset in November to discuss a possible joint bid to take control of Endemol. Even before that, Mediaset had confirmed it would consider a bid for Endemol, though formal talks were never launched.

Since then, however, Endemol shares have jumped by nearly a third, raising the price tag of a potential buyout by as much as €3 billion ($4 billion).